Slide 1: 9M 2014 Financial Results
9M 2014 Financial Results Milan – November 6th, 2014 9M 2014 Financial Results 1
Slide 2: Agenda
AGENDA 9M 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix 9M 2014 Financial Results 2
Slide 3: 9M 2014 Key Financials
9M 2014 Key Financials Euro Millions, % on Sales Sales Adjusted EBITDA (1) Adjusted EBIT (2) Excl. WL Excl. WL Excl. WL -3.3%* sub.project effect sub.project effect sub.project effect 650 494 +0.2%* 613 465 7,574 6,995 +1.7%* 442 438 333 332 5,297 5,095 5,014 355 249 2012 2013 9M'13 9M'14 9M'14 2012
Slide 4: Profitability in line with previous year excluding WL effect
Profitability in line with previous year excluding WL effect Positive organic growth in 9M despite slowdown in Europe and Brazil Organic Growth Adj. EBITDA % change on same period of previous year Euro million 2013 2014 438 WL 5.3% 83 3.0% 1.8% 1.9% 1.7% 0.2% 163 160 -0.8% -1.9% 9 37 442 -3.1% -3.9%
Slide 5: Industrial Footprint Competitiveness
Industrial Footprint Competitiveness Moving from local… …to regional supply chain 2014 Highlights Energy: Optical Cables: Optical Fiber: • Footprint rationalization • Largest factory by H1’15 • € 50m investment to reduce restarted: ongoing (Romania) costs in 2014-15 consultation processes in Europe
Slide 6: Agenda
AGENDA 9M 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix 9M 2014 Financial Results 6
Slide 7: Utilities
Utilities Euro Millions, % on Sales Sales to Third Parties Highlights Excl. WL -1.4%* sub.project effect DISTRIBUTION -3.1%* • Mid single digit organic decline in 9M. Stabilization of prices and volumes on 2,278 2,217 +1.8%* H1 levels • Europe: weak demand in the Nordics and Eastern Europe, 1,644 1,
Slide 8: Utilities - Strengthening leadership in Submarine to match increasing demand
Utilities - Strengthening leadership in Submarine to match increasing demand in a fast growing sector Transmission – Sales & Adj.EBITDA (€m) CAGR 12% 1,500 ~1,300 350 ~1,250 ~1,150 1,250 ~1,050 300 ~850 Sales (L axis) 1,000 250 750 200 Adj.Ebitda (R axis) 500 250 150 0 100 FY 2010 FY 2011 FY 2012 FY
Slide 9: Trade & Installers
Trade & Installers Euro Millions, % on Sales Sales to Third Parties Highlights -4.3%* • Mid single digit organic growth in 9M, softening from Q2 • Europe: on-going volume recovery driven by Nordics and Eastern 2,159 1,914 +5.3%* Europe, more than offsetting sluggish demand in Central Europe • North
Slide 10: Industrial
Industrial Euro Millions, % on Sales Sales to Third Parties Highlights +4.0%* • Overall Industrial performance impacted by slow-down in the capital goods sector in Europe in the last months 1,801 1,764 -1.9%* 1,339 Specialties & OEM 1,228 • 9M performance impacted by continuous weak demand in Europe
Slide 11: Telecom
Telecom Euro Millions, % on Sales Sales to Third Parties Highlights -15.4%* • Improving organic growth supported by strong demand in optical largely offset by lower average pricing and continuous decline in Copper. 1,202 Continuous improvement in cost structure to support profitability 986 +1.9%* Op
Slide 12: Telecom - Leverage on lean cost base to benefit from ongoing market recovery
Telecom - Leverage on lean cost base to benefit from ongoing market recovery Telecom Optical Volumes FKM • Optical fiber demand expected to increase by 10.8%a in 2014 driven by Europe and India. Positive signals also from North America, ASEAN and China (which represents approx. +21% (16%) 50% of the
Slide 13: Agenda
AGENDA 9M 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix 9M 2014 Financial Results 13
Slide 14: 2014 Outlook – FY Target confirmed despite gradual worsening of market trend
2014 Outlook – FY Target confirmed despite gradual worsening of market trend in Europe and Brazil FY 2014 Adj.EBITDA Target Vs FY 2013 (€ 613 m) Initial expected Adj.EBITDA 600 650 FY Target - €94m Western Link FY 2014 effect Current Adj.EBITDA 506 556 FY Target FY target confirmed in the low-part o
Slide 15: Agenda
AGENDA 9M 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix 9M 2014 Financial Results 15
Slide 16: Profit and Loss Statement
Profit and Loss Statement Euro Millions 9M 2014 excl. WL Submarine WL submarine 9M 2014 9M 2013 1) FY 2013 1) project effect project effect Sales 5,095 (81) 5,014 5,297 6,995 YoY total growth (3.8%) (5.3%) YoY organic growth 1.7% 0.2% Adj.EBITDA 438 (83) 355 442 613 % on sales 8.6% 7.1% 8.3% 8.8% No
Slide 17: Extraordinary Effects
Extraordinary Effects Euro Millions 9M 2014 9M 2013 2) FY 2013 2) Antitrust investigation 28 3 6 Restructuring (16) (32) (50) Price adjustments 22 - - Other (6) (5) (6) EBITDA adjustments 28 (34) (50) Special items 4 (30) (47) Gain/(loss) on metal derivatives 12 (12) (8) Assets impairment (5) (9) (2
Slide 18: Financial Charges
Financial Charges Euro Millions 9M 2014 9M 2013 2) FY 2013 2) Net interest expenses (67) (77) (100) of which non cash Conv.Bond interest exp. (6) (4) (6) Bank fees amortization (5) (6) (8) Gain/(loss) on exchange rates (18) (12) (27) Gain/(loss) on derivatives 1 ) (9) (14) (8) Non recurring effects
Slide 19: Statement of financial position (Balance Sheet)
Statement of financial position (Balance Sheet) Euro Millions 30 Sept 2014 30 Sept 20131) FY 2013 1) Net fixed assets 2,255 2,206 2,207 of which: intangible assets 586 593 588 of which: property, plants & equipment 1,430 1,402 1,390 Net working capital 900 788 386 of which: derivatives assets/(liabi
Slide 20: Cash Flow
Cash Flow Euro Millions 9M 2014 9M 2013 1) FY 2013 1) Adj.EBITDA 355 442 613 Non recurring items 28 (34) (50) EBITDA 383 408 563 Net Change in provisions & others (65) (49) (76) Share of income from investments in op.activities (26) (21) (35) Cash flow from operations (before WC changes) 292 338 452
Slide 21: Agenda
AGENDA 9M 2014 Highlights • Group overview • Results by business • Outlook Financial results Appendix 9M 2014 Financial Results 21
Slide 22: Bridge Consolidated Sales
Bridge Consolidated Sales Euro Millions Total Consolidated 92 ( 81 ) (104) (190) - 5,297 Org. growth excl.WL Org. growth incl.WL 5,014 5,014 +1.7% +0.2% 9M 2013 Org.Growth WL effect Metal Effect Exchange Rate 9M 2014 L-f-L Perimeter effect 9M 2014 Energy Cables & Systems Division 78 ( 81 ) ( 99 ) (1
Slide 23: Impact of currencies and WL project on Sales and Adj.EBITDA
Impact of currencies and WL project on Sales and Adj.EBITDA Profitability decrease fully attributable to WL project and negative currency translation effect Sales Adj. EBITDA Euro million Euro million Of which: Of which: • Utilities 36 • Utilities 2 • T&I 72 • T&I 5 • Industrial 52 • Industrial 5 •
Slide 24: P&L Statement – Application of IFRS 10-11 Vs previous accounting
P&L Statement – Application of IFRS 10-11 Vs previous accounting Euro Millions 9M 2013 9M 2013 FY 2013 FY 2013 FY 2012 FY 2012 Restated 1) Reported Restated 1) Reported Restated 1) Reported Sales 5,297 5,488 6,995 7,273 7,574 7,848 YoY total growth (7.7%) (7.3%) YoY organic growth (3.3%) (3.1%) Adj.
Slide 25: Stat. of fin. position (BS) – Application of IFRS 10-11 Vs previous accounting
Stat. of fin. position (BS) – Application of IFRS 10-11 Vs previous accounting Euro Millions 30 Sep ’13 30 Sep ’13 31 Dec ’13 31 Dec ’13 31 Dec ’12 31 Dec ’12 Restated 1) Reported Restated 1) Reported Restated 1) Reported Net fixed assets 2,206 2,215 2,207 2,190 2,301 2,300 of which: intangible asse
Slide 26: Cash Flow – Application of IFRS 10-11 Vs previous accounting
Cash Flow – Application of IFRS 10-11 Vs previous accounting Euro Millions 9M 2013 9M 2013 FY 2013 FY 2013 FY 2012 FY 2012 Restated 1) Reported Restated 1) Reported Restated 1) Reported Adj.EBITDA 442 444 613 612 650 647 Non recurring items (34) (34) (50) (50) (101) (101) EBITDA 408 410 563 562 549
Slide 27: Energy Segment – Profit and Loss Statement
Energy Segment – Profit and Loss Statement Euro Millions 9M 2014 excl. WL Submarine WL submarine 9M 2014 9M 2013 1) FY 2013 1) project effect project effect Sales to Third Parties 4,350 (81) 4,269 4,534 6,009 YoY total growth (4.1%) (5.8%) YoY organic growth 1.7% (0.1%) Adj. EBITDA 363 (83) 280 361
Slide 28: Energy Segment – Sales and Profitability by business area
Energy Segment – Sales and Profitability by business area Euro Millions, % on Sales Total Organic 9M 2014 9M 2013 1) growth growth Utilities 1,535 1,644 (6.6%) (3.1%) Sales to Third Parties Trade & Installers 1,434 1,470 (2.5%) 5.3% Industrial 1,228 1,339 (8.3%) (1.9%) Others 72 81 n.m. n.m. Total E
Slide 29: Telecom Segment – Profit and Loss Statement
Telecom Segment – Profit and Loss Statement Euro Millions 9M 2014 9M 2013 1) FY 2013 1) Sales to Third Parties 745 763 986 YoY total growth (2.3%) YoY organic growth 1.9% Adj. EBITDA 75 81 106 % on sales 10.0% 10.6% 10.8% Adj. EBIT 44 49 63 % on sales 5.9% 6.4% 6.4% 1) Final restated figures in appl
Slide 30: Reference Scenario
Reference Scenario Commodities & Forex Brent Copper Aluminium Brent $/bbl Copper $/ton Aluminium $/ton Brent €/bbl Copper €/ton Aluminium €/ton 150 12,000 3,500 125 10,000 3,000 2,500 100 8,000 2,000 75 6,000 1,500 50 4,000 1,000 25 2,000 500 J-08 J-09 J-10 J-11 J-12 J-13 J-14 J-08 J-09 J-10 J-11 J-
Slide 31: Disclaimer
Disclaimer • The managers responsible for preparing the company's financial reports, A.Bott and C.Soprano, declare, pursuant to paragraph 2 of Article 154-bis of the Consolidated Financial Act, that the accounting information contained in this presentation corresponds to the results documented in th